Realty Income ticks higher after upsized $875 mln convertible bond sale
O•Valuation and analyst view
The San Diego, California-based firm has a market cap of nearly $59 billion.
Through Tuesday, O shares were up 9.8% year to date, in line with a roughly 10% advance in the S&P 500 Real Estate sector .SPLRCR.
The average rating of 25 analysts is "hold"; the median price target is $68, according to the latest LSEG data.
Proceeds to support general corporate purposes
The company said it intends to use net proceeds for general purposes, including repayment or repurchasing debt, foreign currency swaps or other hedging instruments, development, redevelopment and acquisition of additional properties, among other uses.
It also intends to use approximately $29 million to pay the cost of capped call transactions and about $188.7 million to repurchase shares from initial purchasers of the convertible bonds to facilitate hedging.
Shares rise after larger-than-planned convertible offering
Realty Income's O.N shares were up 0.1% to $61.94 before the bell on Wednesday after the company raised more capital than planned.
The commercial REIT announced pricing for a private offering of $875 million of 3.75% convertible bonds due Aug. 15, 2031.
The offering size was increased from $750 million; the conversion price of $72.72 represents a 17.5% premium to the stock's last close of $61.89.
